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Remote Camps Australia Pty Ltd v Hazeldine Pty Ltd

[2012] FCA 130

Federal Court of Australia|2012-02-23|Before: Barker J

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Court

Federal Court of Australia

Decision date

2012-02-23

Before

Barker J

Source

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Judgment (5 paragraphs)

[1]

application to review registrar's decision 1 On 30 November 2011, pursuant to s 35A(1) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and R 16.1 of the Federal Court (Corporations) Rules 2000 (Corporations Rules), a Registrar of this Court exercised the power of the Court to hear an application made by the plaintiff (Remote Camps) under s 459H and s 495J of the Corporations Act 2001 (Cth) (Corporations Act) to set aside a statutory demand issued by the defendant (Hazeldine) against it, and ordered that: 1. The application to set aside the statutory demand be dismissed. 2. The plaintiff pay the defendant's costs, to be taxed if not agreed. 2 Pursuant to s 35A(5) of the FCA Act and R 3.11 of the Federal Court Rules 2011 (Cth) (Rules) Remote Camps applied for a review by the Court of the exercise of that power by the Registrar. (As noted in Deputy Commissioner of Taxation v Commercial & General Law (SA) Pty Ltd [2011] FCA 1269 at [97], R 16.1(2) of the Corporations Rules providing for review by the Court or a judge would appear otiose in the face of the provisions I have just mentioned.) 3 The proceeding that now comes before me constitutes a de novo or fresh hearing of Remote Camp's application to set aside the statutory demand, by reference to the evidence available at the time of the review hearing: see, for example, Fazio (Executor) v Passmore [2011] FCA 273 at [31].

[2]

creditor's statutory demand for payment of debt 4 By creditor's statutory demand for payment of debt issued under the Corporations Act, dated 3 June 2011, Hazeldine demanded payment of a debt of $320,391.44 claimed to be due and payable by Remote Camps. Payment was required within 21 days of service. The debt for this claimed sum was described in the schedule to the statutory demand by reference to a judgment against defendant after failure to comply with condition for leave to defend obtained by Hazeldine against Remote Camps in the District Court of Western Australia, proceeding number 2008 of 2010. I will refer to the judgment as the "summary judgment". That summary judgment appeared to be a regularly made and extracted judgment dated 14 April 2011, signed on behalf of the Court by Deputy Registrar Hewitt, in the following terms: UPON THE APPLICATION of the plaintiff [Hazeldine] by chamber summons filed 11 October 2010 and UPON HEARING Ms Levy for the plaintiff and Mr Rumsley for the defendant [Remote Camps], and UPON the Orders of Deputy Registrar Hewitt on 1 and 15 February 2011, giving the defendant conditional leave to defend this action, and UPON the failure of the defendant to satisfy the condition for leave, IT IS ADJUDGED THAT:- 1. The defendant do pay the plaintiff the sum of $297,540.34. 2. The defendant do pay the plaintiff interest on $297,540.34 from 3 January 2010 at 6% until the date of this judgment. 3. The defendant do pay the plaintiff's costs to be taxed. 5 It is not in dispute that the statutory demand in the sum of $320,391.44 includes the interest payable on the judgment debt as provided for in [2] of the summary judgment.

basis of application to set aside statutory demand 6 Remote Camps claim that the statutory demand should be set aside in effect because the summary judgment is defective and is the subject of a pending appeal proceeding in the District Court. 7 At the hearing of this review proceeding before me on 8 February 2012, counsel for Remote Camps drew attention to what initially transpired before Deputy Registrar Hewitt in the District Court on Hazeldine's application for summary judgment on 1 and 15 February 2011, as well as on a review proceeding or appeal before Sweeney DCJ on 25 October 2011 in relation to the summary judgment. Transcripts of those hearings were produced. 8 On behalf of Remote Camps, counsel contended before Deputy Registrar Hewitt that there were issues that precluded Hazeldine from obtaining an immediate entitlement to a money judgment. Deputy Registrar Hewitt (at transcript 38 and 39) made a number of pertinent observations about his assessment of the material before him and what order he considered appropriate in the circumstances, as follows: There were issues about precisely what the contractual terms between the parties were and there were some issues about whether or not Hazeldine would be required to rely on a quantum meruit for work done. When looked at in total, it was clear that Hazeldine would succeed in obtaining a substantial judgment. However it was not appropriate to give a money judgment and there were some legitimate concerns about whether the full amount of the invoices claimed could be recovered by Hazeldine. Weighing up all matters, the appropriate way to determine the matter was to require a payment into court by the defendant as a condition of leave to defend, although fixing the sum was "extremely difficult in the circumstances, given the vagaries of the case". "But given my impression of the conduct of the defendant, I think the sum should be a substantial one. In my view, a payment into court of some $100,000 will be comfortably less than any amount which the plaintiff is likely to receive, but will require the defendant to demonstrate the bona fides of its belief in its defence as a condition of continuing to defend further". The order should be: "The defendant have leave to defend the action, conditional upon payment of $100,000 into court". 9 The Deputy Registrar then adjourned the matter to 15 February 2011 to enable Remote Camps to make submissions about the period in which the payment in should be made. 10 The Deputy Registrar indicated he did not want the order extracted immediately and it would constitute "an aide memoire" when he finally decided the appropriate terms of the order on 15 February 2011. 11 On 15 February 2011 the Deputy Registrar required the payment in to be made within 21 days. 12 There is no dispute that Remote Camps knew it should pay $100,000 into Court with 21 days of 15 February 2011. 13 What happened then was that the payment into court was not made and Hazeldine moved for summary judgment to be entered. 14 On 14 April 2011, Deputy Registrar Hewitt signed the summary judgment. 15 On 3 June 2011, Hazeldine issued its statutory demand. 16 Recognising that the judgment entitled Hazeldine to issue the statutory demand, Remote Camps commenced a review or appeal proceeding in the District Court on 17 June 2011 to remove or vary the judgment. The application to extend time to appeal and the appeal came before Sweeney DCJ in the District Court on 25 October 2011. Her Honour extended time to appeal but dismissed the appeal. 17 District Court Judge Sweeney treated the appeal as a review on the merits of the Deputy Registrar's decision. Having considered what occurred before the Deputy Registrar her Honour said she was not prepared to go behind his ruling that leave to defend should be granted conditionally. 18 Her Honour also noted that no appeal had ever been lodged against the decision made on 1 or 15 February 2011, either on the substantive basis that leave should not have been made conditional, or on the basis that the orders made by the Deputy Registrar did not in some way accurately reflect the Deputy Registrar's reasons and intentions. While observing there was nothing that precluded Remote Camps from appealing against the orders of 1 and 15 February 2011, her Honour said she was not satisfied, for the purposes of the appeal before her, that the orders made on 1 and 15 February 2011 did not accurately reflect the Registrar's reasoning in any event. 19 Consequently, Sweeney DCJ extended time within which to appeal but refused the appeal before her. 20 Remote Camps soon after lodged a fresh appeal proceeding to extend time to appeal and appeal against the order made 15 February 2011. By its draft notice of appeal, Remote Camps proposes that, if successful, an order that should be made to the following effect, if the defendant does not pay $100,000 into court within 21 days: 1. the plaintiff is not entitled to recover a money judgment; 2. the plaintiff is entitled to enter judgment against the defendant for an unliquidated sum, representing the reasonable amount payable for the work actually and reasonably carried out by the plaintiff and the reasonable costs of materials supplied. 21 Counsel for Remote Camps indicated in argument on 8 February 2012 that the order sought in these terms reflected observations made by Sweeney DCJ in the course of the review appeal concerning the different ways in which a conditional leave to defend could possibly be framed. 22 When all this became clear at the hearing before me on 8 February 2012, including that Remote Camps had further appealed but had not sought any stay of execution of the summary judgment, I adjourned the hearing until 21 February 2012 to permit Remote Camps the opportunity to seek such a stay. I indicated that, in my view, in the circumstances outlined by counsel for Remote Camps, there would be a strong argument that such a stay should not be given unless Remote Camps were to pay $100,000 into the District Court as originally envisaged by the 1 February 2011 order and as proposed by the draft notice of appeal. 23 On 21 February 2012, when the hearing resumed, counsel for Remote Camps advised the Court that Remote Camps had applied for but been refused a stay of the summary judgment.

Remote Camps Australia Pty Ltd v Hazeldine Pty Ltd

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